Although the recession continues to linger in Las Vegas, Sin City will begin seeing signs of an economic upturn this year, with an accelerated recovery to follow in 2012, Moody's Investors Service predicted in a market update released last week.
According to the
Las Vegas Sun, Moody's expects the Las Vegas recovery to continue encountering hurdles in the form of higher airfares, fewer flights, high unemployment and declining home values — all of which continue to hurt consumer confidence.
Also slowing the city's recovery, meanwhile, are supply — the market is still absorbing more than 4,000 hotel rooms added in late 2009 by CityCenter and 2,000 rooms added last year by the Cosmopolitan, which expects to open another 1,000 room this year — and competition: Properties that have recently changed ownership, such as Planet Hollywood and the Tropicana, "are likely to become more aggressive with respect to room rates or other promotions to regain lost market share," according to Moody's.
Nevertheless, said Moody's analyst Peggy Holloway, "the Las Vegas Strip is showing signs of modest improvement as consumers and businesses are becoming more willing to spend on leisure and business travel."
According to Holloway's forecast, which takes into account fourth-quarter gains in visitor volumes, gaming revenue and average daily rates, the Las Vegas Strip will see incremental gains this year, but — because of the aforementioned obstacles — won't see increasing profits until 2012.